The pending home sales index rose in January for the third consecutive month, indicating that the housing market is continuing to show signs of improvement. The index, which measures the number of contracts to purchase previously owned homes, increased by 3.1 percent from December to January. This growth can be attributed to a number of factors, including lower mortgage rates, a healthier job market, and increased consumer confidence.

Low mortgage rates are certainly making housing more affordable to prospective buyers. The average 30-year fixed rate mortgage dropped to just 3.29 percent in January, down from its peak of 4.03 percent in November. Furthermore, the decrease in unemployment to 3.6 percent in December has allowed many potential homebuyers to feel secure about making a purchase. Increasing consumer confidence, as measured by the University of Michigan Consumer Confidence Index, has also contributed to the rise in pending home sales.

The demand for housing has been so high that there may even be a shortage of homes in some areas. This problem is being compounded by the current slow pace of new homebuilding, as construction growth has been sluggish for the past several years. As a result of the high demand, home prices are rising and are likely to continue to do so for some time.

Despite the rise in the pending home sales index and the positive trends in the housing market, the real estate industry is far from the strong market it was before the 2008 recession. There is still work to be done to rebuild the housing market, but if current trends continue, the market could soon be back to where it once was.

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